It’s puzzling why one out of 10 overseas filipino workers (OFWs) is financially broke, when OFW remittances or the money they sent back to the Philippines totaled P1.20 trillion last year.
On top of that, a study by Social Enterprise Development Partnerships Inc. noted that 80 percent of OFWs return to the Philippines with no savings.
Apparently, OFWs experience financial challenges specific to their situation – from sending the bulk their hard earned money to their loved ones in the Philippines, to investing in idle assets such as houses.
Before it’s too late, OFWs should maximize their time abroad.
Here are five financial goals for OFWs:
1. Zero debt
While in your prime years of earning, set aside a percentage of your salary for debt payment. Take it a step further and allot windfalls such as bonuses to debt payments to extinguish your debt faster.
Interest on loans and credit cards may be higher than the return on investments, so pay off the bulk of your debt before you invest.
2. Retirement fund
Grow your retirement fund the moment you start working. Numerous online calculators can help you compute how much you will need to retire and live the lifestyle you want.
Once you know your retirement numbers, set a portion of your salary for your retirement fund.
3. Diversified investments
Apart from investing in real estate, open an investment account through your local bank or with a brokerage firm when you come back to the Philippines for a vacation.
Banks offer a diversified selection of UITFs or unified investment trust funds and time deposits. Insurance providers offer mutual funds. Stock brokerage firms let you trade and participate in the stock market.
4. Multiple income streams
Look for freelance opportunities where you can showcase your skills while earning extra income. Use network and online freelancing platforms to make extra cash.
5. Help your loved ones gain independence from remittances
Support your family by fostering their personal and professional growth. One of the best ways to do this is through education.
Putting your children through school is one of the best investments, since you're setting up your children for success and a brighter future.
Instead of buying Apple products, why not buy Apple Inc. stocks for them?
Encouraging your children to start a business so they can have their own source of income is an invaluable approach to help them gain financial independence.
Time will come when you’ll have to stop working. If you plan right, you can live the kind of life you’ve always dreamed of when you retire.
Expenses don't stop when you stop working. So it’s best to live your retirement years with a well-padded retirement fund.
Make the most out of your high-earning years, and return to the Philippines with savings and the freedom to enjoy the fruits of your labor.
This article first appeared on MoneyMax.ph.